Connecticut official warns consumers to watch electric bills

Third-party suppliers may not be the best deal

Published
9:30 pm EDT, Monday, October 19, 2015

Connecticut Consumer Counsel Elin Swanson Katz is warning consumers who are either considering purchasing electricity from third-party providers or do so all ready to remain vigilant in reviewing their bills.

Katz said data provided to the Connecticut Public Utilities Regulatory Authority showed that more than three-quarters of customers of both Eversource Energy and The United Illuminating Co. paid more than the standard service rate in August if they used a third-party supplier.

The standard service offer is the generation option for residential customers who do not choose their own third-party supplier.

Some customers paid prices that were as high as 23.7 cents per kilowatt hour, which is nearly three times Eversource’s standard service rate and more than two-and-half times that of UI, Katz said. The Eversource standard service rate is 8.2 cents per kilowatt hour, while the UI standard service rate is 9.12 cents per kilowatt hour, she said.

Both standard service rates are set through December 31.

“Customers should be aware that switching to a retail electric supplier can be a risky proposition,” said Katz, whose office represents the interests of consumers in utility rate cases. “Some suppliers are charging certain customers more than twice the standard service rate, even in the summer months. There is no ceiling on the rates that third-party suppliers can charge you.”

OCC has determined that between January and August of this year, Connecticut customers of electric suppliers, as a group, paid more than $23 million more for electricity than if they had been on standard service, she said.

Eversource, which serves a total of 1.1 million residential customers in Connecticut, says 384,437 of them are served by a third-party provider. UI, which has 297,408 residential customers in the state, reports that 114,542 of them are served by third-party electric suppliers.

Katz told a teleconference audience of about 300 members of the Connecticut chapter of AARP Monday morning that the state has “some of the (nation’s) strongest consumer protections in place for the third-party electric supplier market.” But she said the laws Connecticut has in place aren’t perfect.

For example, Katz said state law doesn’t prohibit third-party providers from asking for pre-payments from customers or enrollment fees.

“I urge consumers to think very hard before sigining up for a service that charges a payment in advance or enrollment fee,” she said.

Rules regarding what third-party electric providers can charge customers for leaving for another provider have limited termination fees to no more than $50 total, no matter how many months are left on the consumer’s contract, Katz said.

“I’m very concerned about termination fees in general,” she said. “They can undermine the savings that people have achieved,”

The Connecticut General Assembly passed legislation this year that prohibits electric suppliers from signing up customers for variable-rate contracts with rates that can change monthly and from renewing existing contracts into variable rates. That prohibition started Oct. 1, but applies only to new contracts and contracts that are renewed after that date.

John Erlingheuser, advocacy director for AARP Connecticut, urged the organization’s members to take part in a PURA hearing on third-party electric suppliers Tuesday at 6 p.m. in Room 1D of the Legislative Office Building in Hartford.